Problem solving in business, that was my wholesaling journey in about 2018, 2019. And my goal was to source off market direct to seller properties. I could renovate it and refinance it and probably get money back and get the property for free too. Success is when my passive investments pay for my personal monthly lifestyle. And every day that I go to work, I want to go to work. I don’t have to go to work. I love what I do. I love the game of what I’m doing. And for me, it’s more sport at this point. The regulators don’t like equitable interest. Now, I think wholesaling may be gone, but the process of doing it may change. For me, I like to target probate leads and probate data because probate, as we were mentioning before-

What’s going on everyone? Welcome back to the REM podcast. Today we have Danny out of Arizona. Danny, I’m just curious, what brought you into real estate?

I mean, biggest thing for me, right? It’s what most people say I want to be financially free. And what’s one industry that has created the most amount of millionaires? Obviously, most people know that’s real estate. However, going into it, actually becoming a millionaire and actually going through the process of getting there is a hell of a lot harder than what you initially read in Rich Dad, Poor Dad. When I saw that real estate was an asset and all I have to do is buy cash flowing real estate and then I’ll be financially free. Little did I know and more did I find out that no rental properties actually make money. You have to do a hell of a lot more things in real estate to actually become financially free. But for me, I just kind of wanted to get on that time and money freedom where I could live my life on my own terms.

I was working in jobs I didn’t like and like most employees at the time feeling undervalued for your performance and work. And for me, I wanted to get into an industry where my results and my performance equated to the money in which I made. Where in most jobs, the more performance driven you are, the more results you bring in may not equate to the money that you make. So people get into this kind of rabbit hole where, well, if I put in more time and energy, I don’t get more money. Whereas wholesaling and real estate, hey, if I make more calls, if I get more deals, if I do more contracts, that’s going to equate to me making more money.

Awesome. Love it. Cool. When it comes to your business today and what it looks like, what does your business look like today and what are you focusing on now?

Yeah. So for me, I am mainly focusing on share buyouts. For the past six years, I had a larger scaled wholesale operation out of Mesa, Arizona. And recently partner and I just sold our office building, got rid of our team. And I’ve been venturing off on my own, starting my own path. And I ran the course of running a big team for six years, spending 100K plus a month in marketing and overhead. We ran an extremely successful business, which I was super thankful for when we ran it. However, a lot of the pitfalls, like most people go through, we had high overhead. The industry is ever changing. There’s so much more AI going on. A lot more people are outsourcing overseas. So when I was running my wholesale business too, I was also doing deals of what I do now, which is curative title and share buyouts.

And over the years, I was doing a couple of those inherently through my wholesaling business, unknowingly doing these deals where I buy out the percentage of ownership or I buy out a third of a property, 50%, 70%, whatever it was. And I did a couple of those deals and every time I did those deals, I’d make 60, 70, $100,000. And I said, “Holy shit, these are great deals. I don’t really know what they are or exactly how we do them fully, but it’s cool if I do more.” Then I started attending some events about two years ago regarding the curative title space where really you are targeting deals with extensive title issues that need work with an attorney, work with an attorney to clear that, whether that’s a quiet title action, a partition action, different types of probates, complex probates I’ve done. And once I really learned the concept of it, which was more curative title work, then I started diving fully into it.

And I’ve been doing deals in different states and jurisdictions. And it’s been obviously a learning process too, but the profits in which I see and where the wholesale industry is heading into, I think as an investor, you have to adapt with what’s going on. Wholesalers are getting squeezed out. There’s more regulations. The regulators want to terminate equitable interest. And the space that I’m targeting now where I buy these deeds and buy out the percentages of ownership, I’m not wholesaling, I’m an end buyer actually purchasing these deals.

From what I’ve heard about it, it’s a very fascinating concept. You can get into them very cheap, right? I mean, it’s not like you’re having to buy the third for what it’s necessarily worth all the time, right?

No. I’m averaging buying anywhere from 30 to 50 cents on the dollar from what a share value is. So for example, if it’s worth, the property’s worth 100K as is, and it’s owned by two people, each share is worth $50,000. I acquired that share anywhere from about five to $15,000.

That’s awesome. Yeah. I was at a mastermind a couple weeks ago and people were talking about that model and getting into it. It’s very fascinating. But to rewind the clock a little bit before you got into real estate, what was your life like before investing?

Before investing, I was big into wrestling throughout high school and college, and I wrestled pretty much throughout my whole life. And that was kind of, I guess you could say, my passion before business and real estate. And I attended a division three college and wrestled there in Rhode Island. And once I finished that, I was actually working for Enterprise Rent-A-Car in New York where I’m originally from and kind of was just on the hamster wheel a little bit, making money, going out, living for the weekends kind of. And then I got presented with a job opportunity in Arizona. Also irrelevant to real estate. I did sales in UPS and I came out here, which was supposed to be for one year. And then I did sales through the phone for small businesses that wanted to either ship with USPS, UPS or FedEx. And they all suck and you had to pick one of three.

And that was the unfortunate part of my selling is I didn’t really deliver great value because we couldn’t fulfill their orders or get things done on time. And it kind of felt like a nightmare. And I knew I wanted to change probably about six months after I moved out here. I was kind of done with corporate America. I didn’t feel like I was growing and I got a second job working on the weekends at bars and restaurants to save up enough money to eventually dive into real estate. And that was my plan is I worked from nine to five at my sales job, and then I worked from six to about 12:00 AM or in some cases 9:00 PM to 3:00 AM. And I did that for almost a year, saving money so I could dive into real estate. And that was my life before, just a normal person.

My family’s not in real estate. My family has no entrepreneurial businesses, no first cousins, no nothing. I mean, I’m a first generation real estate investor and entrepreneur in my family.

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Sales is definitely much easier when you believe in what you’re selling. When you don’t believe in it, it’s very tough to sell it. So I can definitely see your issue there. When it comes to problems, what problem were you trying to solve when you started your business?

I mean, my problem, right? I was broke. So personally, if that’s what you mean, I was trying to solve that problem, which was to get more money, right? I had a certain amount of monthly expenses and I wanted to have enough money to buy me enough time to where I could have options, I could make decisions, and I could live a life more on my terms. And that’s what it was starting out. Problem solving in business, that was my wholesaling journey in about 2018, 2019, and my goal was to source off market, direct to seller properties. And that’s exactly what I targeted when me and my partner started up our wholesaling business is we went after … I mean, mainly I did a lot of absentee owners. That was my bread and butter and one deal kind of led to another and slowly over time, it was a very jerry rigged business, as I say.

Nothing was figured out, everything was kind of bootstrapped and that’s how I tell people it should be done today. Everyone’s worried about their website, their business cards, their this, their that, before they ever even pick up the phone and make an offer to someone.

Yeah. What’s the most common misconception among investors about what you’re offering now with the buyout?

For most investors, a big thing is they don’t even know that it can be done. At least more experienced people like yourself and other people. They hear about it, but they’re not really actively seeking it. And then most new people, I would say from stage day one to probably about year three, they don’t even know it exists. So anyone that’s making calls that has a wholesale operation and they are working these leads, at some point you are a thousand percent going to come across these deals. And I get them directly from sellers and I also get a large majority from my network as well, from talking about it, from putting it out there. And so many of these people, they say, “Holy shit, I have a property,” or, “I just spoke with someone three months ago and I freaking threw out the lead.”

Yeah. What would the investor look for? What type of deal are you looking for? What situation are you looking for for that to make sense?

So the main thing that I’m looking for is I’m looking for a property that’s owned for me, right? Because I’ve done over a dozen of these deals and I’ve had ones that have gone south and I’ve had 90% of them all make a lot of money. But for me, my ideal prospect is a property owned between two to four people that are in some type of disagreement with what to do with the property and they hold title as what’s called tenants in common. So they’re not a married couple. And for those that are not familiar, tenants in common is a legal terminology on how you hold title. So there’s a couple ways you have community property, which is in Arizona, there’s equity distribution or something like that in other states. So that’s when you’re a married couple. When you own it as community property, you cannot fire sale your share to someone because you’re mad at your wife one day.

You both have an equal claim to that, and that has to get processed through a divorce. The second one is joint tenants with right of survivorship, which is if you and I were married and I passed away, my share would automatically pass to you without ever going through probate. And you can do share buyouts on joint tenants. And then the last one, which is the most common for targeting these is tenants in common. And tenants in common, as you’ll see on a title commitment, it’ll show John Smith, Mary Smith hold title as tenants in common. And tenants in common gives you the ability to sell your share to whoever you please at any point in time.

It’s typically siblings, right? Or like some sort of family member that’s not a married couple?

My picture perfect scenario is mom died, we probated it and it went to us three to four siblings. We have one sibling living in there. He’s living rent free. He doesn’t want to move. And I live in Georgia, the property’s in Arizona and I’m sick of my brother and I just want out of this property. So take my share, take my 50, 60, 70% ownership and go work with my brother who has the other 30% ownership because I can’t deal with him. That’s the majority of how these properties have multiple owners on title. And other ones I’ve done, they just maybe bought it together a couple years ago. I did one with a father and mother, sorry, a father and a daughter who bought it together and the daughter was batshit crazy and the father was also out of state and we bought his share and they just bought the property together years ago.

So that’s kind of the reasons why multiple owners end up on title together.

Gotcha. Okay. Yeah. It’s definitely a fascinating niche, a niche within a niche, I would say. Yes. When it comes to … So post, you buy out the share and then you take it to court, right? And you’re kind of pushing the sales. It’s kind of the whole point of it, right?

That is the partition route, yes. So my process that I do, I buy out the shares, whatever that percentage of ownership is, and I approach the other co-owner and my three options are, “Hey, here’s the situation. This is what has occurred. Would you like to … ” My preferred method is, “Hey, I would like to make you an offer to buy out your share.” That is the preferred option. Number two is you can buy my share out, likely will not occur because they haven’t bought out their siblings in all these years. Number three is we can sell the property together and then we both divvy up the percentages of ownership through the proceeds. And number four is there is no agreement to those three options, and then I serve the partition, the partition suit, which likely then it kind of gets them back on board because a lot of these people are … It reminds me of a person in foreclosure.

“Hey, this isn’t real.This isn’t happening. You’re not the actual real owner. You’re not actually going to take the house away.”

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Again, that’s 10xtv.co. Awesome. What are two key strategies that you would say are prevalent to the model that you’re doing right now?

I mean, number one is obviously getting the leads, right? So for me, I like to target probate leads and probate data because probate, as we were mentioning before, is likely going to have those scenarios inherently by having a deceased owner and a certain amount of heirs inheriting that property. It automatically creates the scenario that I’m looking for. Number two is having the capital as well. I’m delegating almost a million dollars of my own money, obviously across multiple deals, multiple jurisdictions, but I love this model because your average Joe can’t even get a hard money loan. A hard money loan will give a loan to someone with a pulse, but I can’t approach a hard money lender, go to Kyavi and say, “Hey, Kiavi, I have a 67% ownership in this property. Will you give me a loan for that? ” They’ll look at you like you’re crazy.

So you need close relationships to private money, which I have, and then also your own source of capital as well, because the cost of the deal really is the acquisition cost for the share buyouts, and then you’re going to have attorney fees, likely. So that’s kind of the way I compare it is like, all right, I’m purchasing the property and I’m renovating it, but my legal fees are essentially like my general contractor. The legal fees is what’s curating the title, which can be expensive as well. I’m sure you’ve worked with attorneys and you’ve got a bill that you can’t believe.

Fair enough. When it comes to that process of once you get it under contract or I guess you buy it, to the point of sale, I’m sure there’s a lot of mistakes that could be made. What do you think are the top mistakes that investors make when doing their first couple of these deals?

Like myself, I’ve had this deal going on for a year and a half and it’s to this day is my number one mistake. I just got the deed deeded over to me day one and I never got a title commitment. That is always my first and foremost step when doing these deals is I need to verify through a title commitment with a certified title company, the information that you’re telling me. And I need to verify that if there’s any other claims against the property or if there’s any back taxes, liens, judgements, because that would affect the equity in the property. And all of my numbers and all of my projections are based off of what I’m valuing the equity as. So if I value the property and I see that there’s 100K of equity owed, but then I … 100K of equity owed and it’s owned by two people, so each share is worth $50,000.

If I go and get a title commitment and it shows there’s 20K of back taxes and a $10,000 judgment, now there’s only 70,000 of equity. Now that share value, what I anticipate as 50 grand is now worth 35,000 because of the other liens and encumbrances against the property. Now, if I just took someone’s word for that, as we know in this business, as you never should, that’s how your numbers completely get altered and you could find yourself paying more than what the share is actually worth. So that’s my number one thing is you always, like any normal deal, you sign them with a normal purchase contract and whatever your title company is, I prefer locally in that market, is bring that to them. And if they can’t even process the transaction, at least get a title commitment so I can know, “Hey, what exactly needs to be done so I could get a clear title later on?

” Because I can self-perform it and I can buy it outside of title, but I need to verify there’s no further liens or encumbrances against the property.

Gotcha. I guess this would kind of depend on the property, but when it comes to maybe a property that isn’t fully renovated, I’m sure some people living in some of the nicer ones you can kind of just sell in the MLS, but for some of the ones that aren’t as nice, are you just selling them to an investor or obviously once you get the other party to sell or agree to sell, are you selling it to a investor or who are you selling it to?

I mean, at that point in the scenario you’re describing, if I have 100% ownership, I mean, I like to clear the property out and if I can list it and get the absolute most amount of money and most amount exposure, that’s my preferred method. Obviously, if I could sell it off market for a decent price, close in seven to 14 days, that’s advantageous as well. But with this model, if you get 100% ownership, you’re not restricted to, “Hey, I got 10 days of an inspection period, I got to sell it off market, and if I don’t find a buyer, I’m screwed.” I own the property 100%, so I could list it, I could blast it off my heart, I could do whatever I want. I could renovate it and refinance it and probably get money back and get the property for free too.

Huh, okay. I’m sure you could rent it as well, for sure.

Rent it, refinance it, buy a title commitment later on as well, and then you can refinance a property, have zero money into it, probably get money back with how deep these are discounted, and buy yourself a title commitment for a thousand bucks, and you have a free and clear title.

Yeah, and a cash flowing property.

Yes.

If you keep it and rent it. Wow, that’s awesome. Wow. Well, when it comes to the word success, everyone’s got their own definition for it. Everyone’s got their idea of what it means to them. How do you define success and what does it mean to you to get to that point?

I mean, for me, it’s always been about what does my life cost and what is the amount of passive income that I’m making per month, and does my passive income pay for my personal monthly lifestyle? And that for me is the most important. And that’s not cash flowing rental properties because maybe you’ll make 300 bucks one month and then pay for your AC for $5,000 next month. I’ve been lending money for about three years now of my own capital and generating 10 to $20,000 a month passive off that. And that’s been plenty of money to take care of my own lifestyle. And for me, it’s about does the money, the money that I make, do I have to put in time for that? If I don’t have to put in any time and I’ve just put in the money and get a return on that, can those returns pay for my monthly lifestyle?

And to me, that’s full financial freedom. If I have to put in 100K into something, but it takes up 10 hours of my day, that’s not passive income, that’s a job.

So for me, it’s when success is when my passive investments pay for my personal monthly lifestyle. And every day that I go to work, I want to go to work. I don’t have to go to work. I love what I do. I love the game of what I’m doing. And for me, it’s more sport at this point. It’s less about so much money. I’ve done so many deals. I’ve made a bunch of money on all the deals. I’ve done every type of deal you could think of. And for me, I’ve found a model I’m really passionate about and I’m working on scaling this to an infinite amount and I’m super excited about it from a wanting to perspective, not from a, “I have to go and do this because I’m broke and I’m dependent on this job or whatever.”

Right. That’s awesome. What are you seeing are the biggest challenges in real estate right now in general?

I mean, wholesaling, as you know, obviously there’s regulation coming. I think for me, I firmly believe there’s probably about three to five more good years of wholesaling, so that’s equitable interest, that’s your pre-marketing it, that’s your selling it, assigning it, novating it. I’m sure they’ll get rid of innovations. The regulators don’t like equitable interest. Now, I think wholesaling may be gone, but the process of doing it may change. You have to take the property down, you have to get legal title, you have to close on it, and then you have to resell it. So that’s a big thing for wholesaling itself. So if you’re just a wholesaler, you need to get capitalized, you need to learn share buyouts, you need to learn how to take legal title and then resell a property as well. So there’s obviously an attack on wholesaling, and if you’re just a one man band and one trick pony, it’s going to be a lot harder for you to make a dollar.

So that’s some of the challenges that I see wholesaling wise, and I feel like everyone should have a direct to seller business because you’re going to get the absolute highest returns and best deals through those marketing channels, as you know.

Yeah. When it comes to the new buzzword, AI, what do you think it’s going to do for real estate and what are you using it for currently?

I mean, I made a funny post about this the other day. I believe we are in, let’s see, 1990s was the dotcom bubble. The big thing and then it burst. The 2000s was real estate. That was a big thing and then it burst. 2010 to 2020, it was crypto. That was the big thing, right? And now we’re in a 10 year cycle of AI. So I believe what’s going to happen is that AI is the new big thing. Companies are going to get over leveraged. Companies are going to be valued simply by optimism and not by actual leadership, actual financials. And in whatever years to come, there’s probably going to be a bubble and a burst of AI. So that’s what I think is going to happen eventually on the AI side for the macro. But for the micro activities, I mean, I use ChatGPT every day.

I can’t think of the last time I actually wrote an email, generated documents for me. It’s done legal work for me. Hey, write up a demand letter to the seller. There’s a judgment of 80,000. “Hey, can you write up a negotiation letter to the attorney to make an offer for 20,000? “So it’s turned into my assistant, it’s turned into my paralegal. I mean, if you’re not using it every day, it’s saving you so much time and money, but do I think it’s going to completely take over the real estate business?

I don’t foresee that. I think it’s going to take a lot of weight off the front end processes where you can auto text with property, you can talk with sellers, but do I think an AI bot is going to come in and start closing Grandma Betty for 50 cents on the dollar? I don’t foresee it there, but But I think a lot of in between little administration crap can absolutely be delegated AI wise.

Yeah. Fair enough. I definitely am on more of your side of that. I think it’s definitely been big in the micro senses of it. I’m wholeheartedly a believer in people want to be sold by people, whether it’s sold something or sell their house to someone. So I’m definitely with you there. But if you were to restart today from scratch, you keep your knowledge, but the business goes away, everything goes away. What would you focus on first to rebuild?

Direct to seller. 100%. I would go direct to seller because when I’m direct to seller, I’m the market maker. I’m not dependent upon, “Hey, agent, send me your deals, wholesaler, send me your deals.” And then I sit at home with my thumb up my ass. I am directly going and getting deals. And when I directly and go get deals and I hold the contract, I have control. I have control of everything. I have control of my disposition strategy. I can wholesale that property. I could flip it. I could make it a rental. I could do a share buyout. When you become the source of the deal, everything else you’ll have the options to do. So for me, it’s wholesaling. It’s going direct to seller, getting leads, getting my phone to ring, and then figuring out how I want to dispose of that property, however it best suits me.

If I’m a newbie, I probably need money. So I’ll probably wholesale that. Someone like myself who’s more established, hey, maybe I need more rental properties to take down and refinance, help me with tax strategy and stuff like that. But I don’t have those options if I am just waiting for someone to send me a deal.

Yeah. Yeah, for sure. That’s awesome. Who has been the biggest influence in your business or where you’re at today?

I mean, for me, I’ve had two pretty big people have a big influence on me. And number one was probably watching Jerry Norton in 2018 and his whole YouTube university. I’ve watched hours and hours of that guy’s stuff. And that was probably my introductory person into this business is seeing a lot of his videos. And then I’d watch his stuff for more instructional how-to stuff. He had so much of that going on on his YouTube channel. And then I would listen to the Real Estate Disruptors podcast, also, which was locally in Arizona. And I listened to that every single episode because that helped me. Yes, I’d see how to do stuff on Jerry’s, but then I was able to see a real human and a real person. Hey, what was this person’s story? Was it similar to mine? What does their business look like? What are some of the struggles they went through?

What were they going through personally while they started their wholesaling business? So I had a mix of how to from Jerry and then watching real estate disruptors and all these successful stories. And a year and a half ago, I came full circle and on Steve’s Real Estate Disruptors podcast, which was just awesome for me because I started watching that. And to be on it years and years later, it was just an absolute blessing for me to go through that experience.

Yeah, that’s awesome. Congratulations, first of all. Where can people find you? Where can people connect with you if anyone wants to learn more?

Yeah, you can message me on Instagram. I have a YouTube channel as well, Danny McBryn, Facebook, Danny McBryn. My most active platform is Instagram. So you can send me deals through there. We can JV on share buyout deals. I can also provide lending on those types of deals and other regular flips, but that’s my main platform is Danny McBryn on Instagram. So you guys can shoot me a follow, connect with me, and hopefully we can make some money together.

Awesome. Awesome. Well, Danny, thank you so much for coming on, everyone. Thank you for watching and we’ll see you next time.

Hey, appreciate it. Thank you for having me.